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Now that you’ve chosen a real estate professional to sell your home,
you’ll need to work together to complete a listing agreement. This
legally binding contract authorizes a broker and his or her real estate
professionals to find a buyer for your home, according to the conditions
specified in the contract. Depending on the type of listing agreement,
you can expect to see most of these terms detailed in the document.
Terms of the Agreement
The length of time the contract will be in effect typically runs anywhere from
30 to 90 days, depending on the local market. Since a contract can be extended
before it expires, you may not want to lock yourself into an automatic extension.
Under Terms of the Agreement, you’ll also find the price of the home. You and
your real estate professional should arrive at the home’s market value after
considering the Comparative Market Analysis (prepared by your representative)
and other factors.
Commission
It may come as a surprise that commissions are not set by the industry. Real
estate professionals expect to earn between 6% and 7% of the sale price,
depending on what’s customary in the area. If another real estate professional
finds a buyer, the commission is split between the two. Although commissions
are negotiable, this practice tends to be reserved for special circumstances.
For instance, if a real estate professional knows of an interested buyer,
this would eliminate the need to market the home. To close the deal, he may
be willing to cut his commission.
Multiple Listing Service (MLS)
This section authorizes a real estate professional to list your home with the
MLS. An MLS listing gives your home greater visibility and even exposes it
to Internet users. Of course, you have the right to opt out of listing with
the MLS. But why should you, when it can dramatically increase the chances
of selling your home.
Lockbox
This hollowed-out padlock or miniature safe holds a key to your home. The lockbox,
which usually gets attached to the front door, allows easy access for anyone
showing the home. Only a person with the combination or with an electronic
key can gain entry.
Description of the Property and Its Condition
Here you’ll find a description of the property and its general condition as
well as the condition of its major systems—mechanical, plumbing and electrical.
Along with the description should be a list of the items that will stay with
the home, for instance, the washer and dryer, and those you intend to remove
such as a light fixture.
Although the forms are preprinted, everything in a
listing agreement is negotiable and may be tailored to reflect your
specific requirements.
Your real estate professional will complete the listing agreement based
on your input, so you may want to take time before you meet to consider
your response to each section of the contract. The more prepared you
are, the less likely you’ll have a misunderstanding down the road.
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